Shift in steel reflects new post-industrial economy

By Stew Slater
columnist

There may be no more stark proof of the downturn in Ontario’s economy than the amount of discarded metal being hauled into scrapyards.
Ending sometime in midsummer of this year, the sector moved through such a high point in its typically cyclical progression that scrap metal had attained a stature not too far removed from legal tender.
I recall doing tractor work in a roadside field one afternoon, and watching as a pick-up truck and trailer –- both heavily laden with rusting detritus, much of which had likely been painstakingly extricated from the brambles that had grown through it as it sat for years in a fencerow –- was hauled northwards to Robson Scrap Metal near the old St. Marys Junction Station. An hour later, the pick-up and trailer -– returning, empty -– stopped alongside our field. Out jumped the occupant, $50 in hand (and, doubtless, a lot more in pocket) -– payment for some custom fieldwork we had done for him.
According to scrapyard operator Kent Robson, the price paid for scrap metal hit a high of $230 per tonne in April of this year. You could sense it up and down the rural concession roads. Junk-laden trailers, like the one that resulted in the repayment of our fieldwork debt, were a common sight. Unkempt farmsteads, with their heaps of abandoned machinery, turned from being neighbourhood eyesores to objects of covetousness.
In the cities, scrap-dealing thieves targetted utility covers, sports field bleachers, statues, and electrical wire (in the Ukraine, dead-of-night desperados even made off with an entire bridge). Robson says his business enacted extra care to avoid taking in anything suspicious.
In Ontario, Hamilton-based steelmaker Dofasco drove demand by purchasing from the scrapyards. With the technology and the heating capability -– in the form of so-called “electric arc furnace (EAF) mini-mills” -– to melt down appliances, cars, implements and waste metal, Dofasco plays a key role in this province’s version of what some see as the most well-developed and long-established recycling system in industry.
According to the website of Dofasco’s parent company, Luxembourg-based ArcelorMittal, “EAF technology can use close to 100 per cent steel scrap as its feedstock ... EAF steels are used to produce such products as structural beams, steel plates and reinforcement bars.”
A less-biased website, www.energysolutions.com, offered that the high-percentage use of scrap makes it “difficult to control the purity and quality of the steel produced; therefore, mini-mills ... have concentrated on market segments where steel quality is not as critical.” And, from an environmental standpoint, the EAF process produces (according to the website of one company that’s developing a waste treatment procedure) “about 15-20 kilograms of dust ... per tonne of steel (that) is considered as a toxic waste due to its content of heavy metals.”
So, over the 25-year shift from traditional coke-fuelled blast furnaces to EAFs, residents of steel-making cities like Hamilton have shifted from dealing with the emissions and wastewater created by the coke-making process, to dealing with the dust from EAFs.
Regardless, due to its ability to recycle instead of using newly-mined ore, EAF technology certainly seems to present environmental benefits. Another industry-generated website (this time, the US-based Institute of Scrap Recycling Industries) declares “the environmental benefits of using recycled steel instead of virgin ore (used in blast furnaces) to make steel are: 74 per cent savings in energy, 90 per cent savings in virgin resources use, 86 per cent reduction in air pollution, 40 per cent savings in water use, 76 per cent reduction in water pollution, 97 per cent reduction in mining waste, and 105 per cent reduction in consumer waste generated.”
Early this decade, the prospects for steel-makers in North America dwindled. A March, 2001 article in “Recycling Today” magazine pondered, “the domestic steel industry is undergoing major trauma. The importing of finished steel from outside North America, soaring energy prices, and a slumping economy are putting the squeeze on the North American steel industry. Who will survive?”
In the aftermath, both Stelco and Dofasco passed from Canadian possession into the hands of deep-pocketed multi-nationals that could weather the storm. But, according to that same article, other mills simply closed, taking thousands of jobs with them.
Dofasco is singled out in that article for finding a way to make the most of its combined EAF/blast furnace capabilities. “The company has ... been able to avoid many of the pitfalls seen with the steel industry,” Recycling Today explained. And the reason given: that the cost for the raw materials in EAFs – namely, scrap metal – was at a cyclical low in 2001.
We’re at that point -– or, possibly, an even lower point –- once again. According to Kent Robson, the price being paid for scrap has gone from April’s high of $230 per tonne to an astonishing figure today of just $25 per tonne. Dofasco has stopped buying.
“We’re still accepting (scrap metal) from customers but that’s all we’re paying,” Robson explained. Employees have been laid off and the business has gone from dealing with around 100 customers per day to just a trickle. “It hardly pays (scrap haulers’) fuel to bring it to the yard.”
A huge proportion of Dofasco’s steel went into Ontario’s auto industry. The future of that market is uncertain.
But a large proportion of the auto industry market was served by ore-derived steel from the blast furnaces. If Dofasco and other steel-makers are going to survive, it seems clear they’ll need their EAFs. And if steel-making communities hope to maintain a workforce in the industry, they’ll need to both accept the effects of EAF dust and pressure steel-makers to continue improving their ability to mitigate the effects of the pollution.
It may all seem remote to St. Marys -– aside from the link to Robson Scrap Metals. But it does cause one to ponder the current St. Marys Cement proposal to test waste plastics as fuel.
Like the steel sector, cement companies will have to shift to non-traditional raw materials in order to survive in what looks increasingly like a “post-industrial” world. And if cement-making communities -– which have already spent decades dealing with the environmental effects of old-style manufacturing –- hope to maintain a workforce in the sector, they may need to both accept the effects of new-style processes and pressure cement-makers to continue improving on their ability to mitigate these effects.